Woofun AI reports that speculative capital is shifting away from artificial intelligence equities toward digital assets, evidenced by the longest streak of inflows into US spot Bitcoin exchange-traded funds (ETFs) since April. This rotation is occurring as institutional investors seek new yield sources amid a cooling AI trade and growing optimism regarding US regulatory frameworks for crypto markets.

The momentum in Bitcoin ETFs accelerated with six consecutive trading days of net inflows, totaling $203.1 million in the most recent session alone. This cumulative six-day figure reached approximately $930 million, marking the funds’ longest winning streak since April. The surge in demand coincided with Bitcoin’s price briefly climbing above $67,000, signaling tentative signs of recovery in institutional appetite for the leading cryptocurrency.

Market sentiment indicators reflect this stabilization, with the Crypto Fear & Greed Index recovering from "extreme fear" to "fear." Since their launch in January 2024, US spot Bitcoin ETFs have attracted $51.8 billion in cumulative net inflows and now hold $80.9 billion in net assets. Despite these totals, the funds remain down $4.84 billion on a year-to-date net flow basis, highlighting the volatility inherent in current market conditions.

Technical analysts emphasize that Bitcoin must hold above the $65,000-$65,500 range to strengthen the case for a sustained bullish breakout. Failure to maintain this support level could undermine the recent rally, which has been fueled by both ETF demand and broader optimism in crypto-linked stocks. The price action suggests that while momentum is building, confirmation of a trend reversal requires sustained volume above these critical thresholds.

Regulatory developments provided a significant catalyst for the rally, with US Treasury Secretary Scott Bessent stating that lawmakers are at the "1-yard line" on the CLARITY Act. This legislation aims to establish a comprehensive regulatory framework for digital assets, reducing uncertainty for market participants. Consequently, crypto-related stocks such as Coinbase, American Bitcoin, and Cipher Digital posted double-digit percentage gains, reflecting investor confidence in the impending policy clarity.

Woofun AI data shows that the cooling AI trade serves as another key driver for this capital rotation. FRNT Financial CEO Stephane Ouellette noted that slowing enthusiasm for AI stocks and growing confidence in the interest-rate outlook could support a breakout in Bitcoin. The Philadelphia Semiconductor Index (SOX), a benchmark for AI chipmakers, recently slipped into a technical bear market after falling 20% from its recent high. This decline was driven by concerns over elevated valuations and the sustainability of AI infrastructure spending, prompting investors to diversify into alternative assets.

Bitcoin miners are actively pivoting toward AI infrastructure to mitigate mining economics challenges. Hut 8 and IREN unveiled multibillion-dollar AI infrastructure agreements, reinforcing the sector’s shift toward data centers and cloud computing. Hut 8 announced a 15-year, $9.8 billion lease for its AI data center campus, while IREN disclosed $2.8 billion in cloud services contracts with AI developers. These deals underscore how miners are diversifying beyond Bitcoin production, with IREN now projecting more than $4 billion in annual recurring AI cloud revenue by the end of 2026.

Despite the market’s positive reaction to these pivots, analysts warn of execution and funding risks. Blocksbridge Consulting estimates the sector will require roughly $50 billion in additional capital to achieve its AI ambitions. This massive capital requirement raises questions about sustainability, especially as insider stock sales have drawn increased scrutiny. Companies such as CleanSpark and MARA Holdings also gained on the news, but the long-term viability of these AI transitions remains a critical variable for investors.

In the broader financial technology space, Bernstein raised its price target on Robinhood to $160 from $130, maintaining an Outperform rating. The investment firm argues that the brokerage’s long-term growth will be fueled by tokenized assets and prediction markets rather than traditional crypto trading. Analysts forecast prediction markets will become the company’s fastest-growing business, generating $1.7 billion in revenue by 2028. Bernstein identified tokenized equities as a major growth opportunity, citing Robinhood’s Arbitrum-based layer-2 network as key infrastructure for bringing real-world assets onchain.

This bullish outlook aligns with Wall Street’s accelerating tokenization push. Companies such as Broadridge, Alpaca, Securitize, and Cantor Fitzgerald are expanding blockchain-based securities infrastructure, signaling a structural shift in how financial assets are managed. As regulatory clarity improves and AI valuations cool, the integration of traditional finance with blockchain technology appears poised for significant expansion, potentially reshaping the landscape for digital assets in the coming years.